Converged Retailing: What to Learn From Big Box Players

Big-box, general merchandise and specialty retailers are in the second – and in a few cases the third – generation of their digital transformation initiatives. This means they have more than two decades’ worth of strategic, organisational and technological experiences that can offer useful information for your first foray into digital and help you avoid known pitfalls.

Grocery’s digital transformation moment has arrived. It’s been 22 years since eBay online marketplace launched and the inevitable path to digital began. Long considered the last bastion of brick and mortar retail, the reshaping of consumer expectations is now rapidly disrupting food retail, requiring hefty measures from retailers.

Big-box, general merchandise and specialty retailers are in the second – and in a few cases the third – generation of their digital transformation initiatives. With more than two decades’ worth of strategic, organizational and technological experiences, there is a lot of useful information we can leverage to give wings to your first foray into digital and help you avoid known pitfalls.

Here’s what we have learned from the experiences of those who’ve been around from the beginning.

1. Digital should not be seen as a channel. It is to be woven across the fabric of the enterprise. Retailers who considered digital primarily a channel are now struggling to unlock the true power of cross-channel influence. Grocers must approach digital transformation as a fundamental overhaul of their customer experience and operations. One of the fundamental building blocks of moving to a more integrated experience across channels is the ability to provide a unified experience to the customer be it on the web, mobile or in the store.

2. Pitting channels against each other creates friction within the organization and makes growth a zero-sum game. Even retailers that have grown the share of ecommerce and mobile sales as a percentage of revenue (between 12%-20% on average for brick and mortar retailers) are now realizing that it is a myopic metric that focuses on channel share rather than overall business growth.
As grocery retailers embark on a journey to provide an elevated customer experience to shoppers, they must be careful not to box ‘digital’ into a familiar channel-centric construct. Digital should rather be seen as an enterprise-wide capability that enables growth, improves customer engagement and drives higher customer lifetime value.

3. Measuring ROI is hard if you can’t measure customer lifetime value or the cross –influence of channels. Grocers embracing digital initiatives must clearly define what success entails and how they’ll measure it. For those that execute well, the potential benefits will drive future growth. Converged retailing is about creating value for the customer through a thoughtful, integrated approach to how digital experiences are embedded into the retail experience. It isn’t about driving growth in any one channel but rather about driving customer engagement and overall growth.

4. Laying out the foundation is key. It is critical to have a core foundation of business processes, people and systems ready before scaling digital initiatives. Retailers that failed to do so suffered significant inventory and labor related operational issues. Prepare the organization for execution excellence by focusing on business processes, training and analytics. Focus specifically on order accuracy & efficiency, store labor optimization and delivery operations management.

Grocery’s digital transformation moment has arrived. When the game changes as much, so do the rules. Grocers have no choice but to evolve. EKN Research, in partnership with Digital Foodie, conducted a survey of 45+ grocery retail executives to benchmark their perception, priorities and preparedness related to the digital transformation in grocery. Learn how the reshaping of consumer expectations is rapidly disrupting the food service industry and how you can maximize value from digital strategies and download the study here.

We at Digital Foodie have successfully on-boarded more than 1000 stores into digital and are happy to help you with all of the tools and processes you need to expand your business online. Contact us here.

Converged Retailing: What to Learn From Big Box Players

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